What Is Litecoin Currency?
When Charlie Lee, an MIT graduate, came across Bitcoin in 2011, he recognized it as a financial disruptor. More than just Bitcoin, Lee was fascinated by the concept of cryptocurrency in general, and he predicted that what the Internet did for information, cryptocurrency would do for currency.
To get a better understanding of the technology behind cryptocurrency, Lee started mining Bitcoin and, once he got the hang of it, he created an alternative currency called Litecoin (LTC). It has become so successful that the queries “What is Litecoin Currency” and “How to buy Litecoin” are among the most popular searches on the Internet.
Litecoin is a decentralized online currency (cryptocurrency). That means it can be used to transfer funds directly between individuals or businesses without the need for a third party (bank or payment processing service). Litecoins can be used to buy online services like web site development, or to buy merchandise like watches, automobile parts, fashion accessories, or pretty much anything else.
The advantage of using Litecoin is that merchants can have a safe and easy way to accept money, without fees or chargebacks. What’s even better, all of the transactions are automatically recorded on a public ledger (a blockchain) so, if a payment has been made, it can be immediately verified.
With Litecoin, one can send money instantly to anybody, anywhere in the world, and the transaction fees are a lot lower than those for traditional bank transfers, and even for other digital payment processors.
Like its predecessor Bitcoin, Litecoin is generated by digital “mining.” The basic idea behind Litecoin was to overcome some of the failings of Bitcoin. One of the biggest differences for end users is that Litecoin takes just 2.5 minutes to generate a block, in contrast to Bitcoin’s 10 minutes. That means Litecoin can confirm transactions much faster than Bitcoin. The implications of faster transactions are:
- Higher volumes
- Reduced risk of double spending attacks
- Faster payment confirmation time.
Given these advantages, it’s not surprising that LTC is getting very popular, which brings up the question of what Litecoin’s supply limit is.
What Is the Litecoin Supply Limit Compared to Bitcoin?
The supply of cryptocurrencies is a big talking point. And that’s because different cryptocurrencies have different supply limits. For example, there can only be 21.0 million Bitcoins in the entire Bitcoin community. Whatever happens or does not happen with Bitcoin, once that upper limit is reached, there are no more Bitcoins to be mined.
Litecoin has a much bigger supply limit. In fact, its supply limit is exactly four times that of Bitcoin’s limit. The Litecoin maximum supply of 84.0 million is a great advantage, as it makes mining less competitive, and thus helps keep the transaction fees low. Thanks to the limited supply, people are trying to figure out how to buy LTC before the Litecoin circulation limit is reached.
How to Buy Litecoin Currency?
The process of buying Litecoins is very similar to that for other cryptocurrencies. It involves three basic steps.
The first step is to get yourself a cryptocurrency wallet where you can store your Litecoins. These wallets can be online wallets (desktop wallets, mobile wallets) or offline wallets (which are like your USB sticks). The most popular online wallets for Litecoin are “Coinbase,” “Jaxx,” and “Exodus.” But a hardware wallet like “Ledger Nano S” offers better security for your currency.
The second step is to find a Litecoin exchange. Most cryptocurrency exchanges trade Litecoins only for Bitcoin and do not accept fiat currency (e.g. dollar, euro, yen). That means you have to first buy Bitcoins and then trade them for Litecoins on exchanges like “ShapeShift” or “Poloniex.”
The good news is that some exchanges, like Coinbase, “BitPanda,” and “Bitstamp” are now trading Litecoins for U.S. dollars and euros.
The third step is to withdraw your Litecoins from the public exchange and dump them into your personal wallet.
Leaving Litecoins on the exchange is akin to leaving money on the dashboard of your car. It is in the public eye. And just like your car can be broken into, the exchange can be hacked or shut down, and you could lose all of your Litecoins.
While the above three-step process seems pretty simple, let’s take a closer look at how to buy LTC on Litecoin exchanges
How to Buy Litecoin on Exchanges
As mentioned earlier, Litecoin is available through most online exchanges. But, depending on your country of residence, you might come across varying degrees of difficulty in acquiring Litecoin for cash.
The exact method of buying may be slightly different on each of the exchanges, but they all follow the same principle. Here’s how it’s done on the most popular exchange, Coinbase. In fact, Coinbase is the most convenient and inexpensive way to buy Litecoin. Coinbase charges you a fee of 1.49% to buy or sell Litecoins.
For example, if you want to buy LTC worth $100.00, and the fee is 1.49%, your total will be $101.49. Once this total is charged to your payment method, you will receive $100.00 worth of LTC.
And if you want to sell $100.00 worth of LTC, 1.49% will be subtracted, so you will receive $98.51 after $100.00 worth of LTC are removed from your account.
The total amount of the transaction in both LTC and your local currency, as well as the fees being charged, will always be displayed on the confirmation screen.
However, if you know how to buy Litecoin with credit or debit cards and want to do so, the fees go up substantially (3.5% to seven percent) on all of the exchanges.
How to Buy Litecoin With Credit Cards
You can buy LTC instantly with credit or debit cards on exchanges like Coinbase, “Changelly” and BitPanda. On Coinbase, the fee is about 3.99% of the transacted amount, but it could be higher on the other exchanges.
Changelly is a cryptocurrency exchange web site founded in 2013, especially for digital currency transactions. Soon after its launch, it introduced an option which allows people to trade Litecoin or any other cryptocurrency by paying with credit or debit cards using a simple process.
It goes without saying that you have to be registered on the exchange to do any trading.
Once you’re on the web site, all you need to do is select the currency, (Litecoin LTC) enter the amount in U.S. dollars that you want to spend, select the mode of payment (credit card), and click on the “Exchange” button.
This will take you to the payment page, where you confirm your order. Once everything looks good, enter your wallet address. You can also find out the estimated time of arrival of LTC into your wallet.
Click on the “Next” button and follow the prompts to pay with your credit card. It’s always good to confirm the transaction. Enter your phone number in the space provided. You will receive a four-digit code on your phone. Enter this code, and your transaction will be processed. You will then receive your LTCs in your wallet.
How to Buy Litecoin With Cash
Given that the cryptocurrency market is still in its early years, people might be a little wary of using credit cards. No problem. Over the past few months, Litecoins are easily available for cash on several exchanges. Two popular exchanges that allow you to buy Litecoin with Cash are Kraken and Snapcard.
Before buying, make sure you have a digital wallet in which to store the coins. Next, find an exchange that accepts fiat currency (another name for cash) and complete the registration and verification process.
Once you’re on the web site, select the currency (Litecoin LTC), enter the amount in U.S. dollars that you want to spend, select the mode of payment (fiat currency), and click on the “Exchange” button. This will take you to the payment page, where you confirm your order. Once everything looks good, enter your wallet address.
If it is the first time you’re doing a transaction into your wallet, test your wallet with a small transaction before sending the funds.
Why Should You Buy Litecoin?
While the world is going ga-ga over Bitcoin, people who actually use Bitcoin know of its many shortcomings. The developers of Litecoin have identified Bitcoin’s weakness and have worked them out of Litecoin in its development stage.
So, although Bitcoin was the first technology to use the blockchain technology, Litecoin uses that technology more efficiently and generates a new block every 2.5 minutes. This is four times the speed of Bitcoin.
Earlier this year, Litecoin activated its Segregated Witness (SegWit) procedure and made the speed lightning-fast. On May 11, money was sent from Zurich to San Francisco in less than a second.
Another great thing about Litecoin is that it will publish more coins on the market than Bitcoin. This will appeal to consumers.
Litecoin’s scrypt hashing algorithm is another huge advantage for newcomers to the cryptocurrency market as it makes it easier for miners to access the system. So more new miners get encouraged to try the system. The simplicity of Litecoin mining might also tempt bitcoin miners to shift to Litecoin.
While the past has been good for Litecoin, and the Litecoin market cap has reached around a whopping $3.8 billion, it’s the future where the real potential is.
Litecoin developers are adding three interesting tech features in the coming months: “MAST,” designed for more privacy and freeing up space on the blockchain; “Lightning Network” (LN), for faster speeds and lower fees; and “atomic swaps,” which will allow people to trade cryptocurrencies without an exchange.
That’s more than enough reason why you should consider Litecoin, and why Bitcoin might want to take a look over its shoulder.